The simian virus 40 (SV40) 72-bp repeat is a eukaryotic polymerase II enhancer element capable of significantly increasing the level of transcription of homologous or heterologous genes in a position- and orientation-independent fashion. The location of the SV40 tandem repeats between the early and late SV40 genes suggests that it might function equally well for both transcriptional units. SV40 late genes, however, are normally expressed only after the synthesis of sufficient amounts of tumor antigen (T-antigen) and/or the initiation of viral DNA replication. These transcriptional properties of the late promoter present a conceptual problem in light of the bidirectional function described for the prototype SV40 enhancer element. Recently, we have found that SV40 late gene expression is activated by the SV40 early gene product, T-antigen. RNA analysis demonstrates that activation occurs at the transcriptional level. Analysis of template mutants and in vivo competition experiments dmeonstrate that the 72-bp repeat is important for T-antigen mediated late gene expression. The mechanism by which the 72-bp enhancer element functions, however, may be different for early and late gene expression. The SV40 early enhancer function can be activated by transcriptional factors which specifcally recongize the 72-bp repeats and are endogenous to many cell types. The function of the 72-bp transcriptional control sequence which contributes to late transcription is inducible by T-antigen. In addition, binding of the putative late transcription factor(s) to the enhancer element apparently requires T-antigen or another transcriptional factor which associates with T-antigen sites I and II. It is not clear whether the SV-40 72-bp repeats function as a classical enhancer (position- and orientation-dependent) for late gene expression.